From NYT:
China launched two days of military drills surrounding Taiwan on Thursday in what it called a “strong punishment” to its opponents on the self-governing island, after Taiwan’s new president pledged to defend its sovereignty.
Map from the article:
Here’s the disposition of US naval forces, approximate as of 20 May 2024.
Source: USNI FleetTracker, accessed 23 May 24.
Caldara and Iacoviello monthly GPR index for Taiwan (thru April):
Source: Caldara and Iacoviello (2022) index.
The presidential election was in January. May estimate not included.
Blackrock has its own index, but last publication was a month ago.
Source: BlackRock, 25 April 2024.
Assessment of market impacts of higher risk:
Source: BlackRock, 25 April 2024.
Unfortunately, in the absence of high frequency GPRs (as we have for the world, from Caldara and Iacoviello), we’ll have to wait until next month to find out the impact on measured risk.
As discussed in this post, a blockade is much more likely than an outright invasion (at least in the near future), while still achieving the objective of wreaking tremendous economic damage.
“China launched two days of military drills surrounding Taiwan on Thursday in what it called a “strong punishment” to its opponents on the self-governing island, after Taiwan’s new president pledged to defend its sovereignty.”
Not to worry. Ace international tax attorney Steven Kopits has a plan where Xi decides not to invade in exchange for 90% of the profits of Foxconn and TSMC.
The claim that a sailing around in circles amounts to “strong punishment” is a typical politician’s effort to tell others what to think. “Punishement” is silly talk. Nobody got sent to bed without supper or made to stand in the corner.
In reality, this is China’s reaction to the results of a moment of democracy – the same reaction we see over and over. The only real concern is that- like Russia just prior to the 2022 invasion of Ukraine – someday China may so.eday pretend to “punish” Taiwan with naval harassment and the keep sailing right up Taiwan’s coast. If we – Taiwan and the U.S. – don’t take these provocations seriously, China may benefit from our lack of diligence.
I have to wonder whether Pelosi’s trip to Taiwan didn’t do more to make westerners aware of China’s belligerence than it did to increase China’s belligerence. China and Russia were on a course toward greater confrontation regardless of our response. Biden’s reassertion of U.S. dedication to our allies hasn’t caused China’s or Russia’s bad behavior – that bad behavior was already underway.
The detruction of Rafah is well underway, which means planning – or not planning – for post-war arrangements is now a pressing matter. Looks like the U.S. is taking it more seriously than Netanyahu:
https://www.politico.com/news/2024/05/23/us-postwar-gaza-00159723
The State Department is discussing providing the “top senior advisor” to what is expected to be a “Palestinian force” in Gaza.
Two inpressions arise from my reading of the article. One is that the U.S. doesn’t want Israel near the place. The other is that the U.S. is taking a good deal for granted – unless other parties have already cleared a large role for the U.S.
In an interesting coincidence, the International Criminal Court has issued arrest warrants for Israeli and Hamas leaders, and the State Department has leaked memos suggesting that the U.S., rather than Israel or the Palestinian Authority, might be a good choice for “top senior advisor”.
Oh, and the Saudi government might have been complicit in the 9/11 attacks:
https://www.theatlantic.com/ideas/archive/2024/05/september-11-attacks-saudi-arabia-lawsuit/678430/
Who’s surprised?